Fitch Ratings has affirmed the ‘AA-’ long-term rating on the series 2018A and 21018B bonds issued by St. Tammany Health System. In addition, Fitch affirmed the health system’s ‘AA-’ Issuer Default Rating, declaring the rating outlook to be stable.
In an analytical conclusion included with its announcement of the upgrade released on Aug. 18, Fitch wrote:
“St. Tammany's 'AA-' rating reflects the system's strong operating risk assessment and very strong financial profile supported by consistently robust operating cash flows that have sustained St. Tammany's robust liquidity and solid debt service coverage. St. Tammany has successfully navigated pandemic and post-pandemic challenges despite labor cost inflation and other operating pressures affecting the healthcare sector.
“The rating also reflects St. Tammany's leading market share and favorable payor mix in a growing service area, and good overall revenue defensibility supported in part by its Joint Operating Agreement (JOA) with the Ochsner Clinic Foundation and Ochsner Heath System (Ochsner). Under the agreement, St. Tammany and Ochsner coordinate clinical services and share the combined operating income. St. Tammany will also participate in Ochsner's recently announced partnership with MD Anderson Cancer Center in a fully integrated cancer care partnership as the only partner in Louisiana and one of seven fully integrated MD Anderson partners in the U.S.”